Automated payment system and method

ABSTRACT

A system and method of collecting payments an automated system to generate a draft, payable to the creditor and drawn on the payor&#39;s checking account, pursuant to the payor&#39;s authorization. The draft is then executed by the debt collector as authorized signatory for the payor, and deposited into the payee&#39;s account to complete payment. The automated system has a simple input screen which receives the necessary information for generation of the draft, which may be read to the system operator over the telephone by the authorizing payor. The system verifies the bank and account information by comparing the input information to records in a database associated with the system. Optionally, the system may also generate an inquiry to the bank to determine the availability of funds in the payor&#39;s account. When verification is complete, the system generates a paper bank draft payable to the payor, using MICR ink so that the draft can be processed in the banking system like an ordinary check. The signature block of the draft is made for the collection agent &#34;as authorized signatory for&#34; the payor.

This is a Divisional application of Ser. No. 07/959,930, filed Oct. 15,1992, now U.S. Pat. No. 5,504,677, issued Apr. 2, 1996.

A portion of this disclosure contains material in which copyright isclaimed by the applicant. The applicant has no objection to the copyingof this material in the course of making copies of the application fileor any patents that may issue on the application, but all other rightswhatsoever in the copyrighted material are reserved.

FIELD OF THE INVENTION

The present invention relates to systems and methods for collectingpayments using an automated draft printing system operated by a paymentcollector.

BACKGROUND OF THE INVENTION

The effective operation of the modern economy depends on the readyavailability of payment mechanisms by which funds can be transferredbetween parties. A number of mechanisms have been available for use bothat the point of sale and for collection of debts relating to earliersales. At the point of sale, the most popular payment mechanisms inrecent times have been cash, personal checks, and bank-issued creditcards, including MasterCard™, VISA™, Discover™, and American Express™.Other methods of payment include store-issued credit accounts, bankaccount debit cards, Cash-on-Delivery (COD), and contracted paymentplans in which the customer agrees to pay for goods or servicesaccording to a predetermined schedule.

Cash in advance is the only one of these methods that is not subject toa later non-payment or revocation which would prevent the merchant fromcollecting the amount due. Personal checks may be returned forinsufficient funds and are subject to stop payment orders by the maker.Credit card sales are subject to federal laws which permit non-paymentor at least a considerable delay of payment if the customer indicatesdissatisfaction with the quality of goods or services rendered. Theissuers of credit cards, credit accounts, and payment plans run the riskthat the credit bill, even if not disputed, will not be paid accordingto the credit agreement. Debit card sales are subject to federalelectronic funds transfer regulations which make it possible under somecircumstances to later disallow a transaction. Cash-on-deliverytransactions may be rejected by the purchaser at the time of delivery,leaving the seller to absorb the cost of the failed delivery. While somerefusals of payment are the result of a legitimate dispute between thebuyer and seller, many of these cases are a breach of the customer'sduty to pay. Losses from bad debts must be absorbed by the merchant andpassed along to future customers. Thus, most merchants might prefer tocollect from their customers in cash.

However, the risk of loss inherent in carrying large amounts of cashdiscourages many people from carrying cash and using it to pay for moreexpensive goods and services. Also, when goods or services are to bedelivered at a later time, customers do not wish to pay in advance andthereby assume the risk of default or bankruptcy of the seller beforethe goods or services are delivered. Finally, in many cases the customerdoes not have the funds to make the purchase, and needs to finance thepurchase by borrowing. For these reasons and others, these alternativepayment mechanisms have collectively become much more popular thanpaying cash in advance and merchants necessarily offer alternativepayment methods.

Various systems have been developed to reduce the risk to merchants inaccepting checks or other non-cash instruments. For example, U.S. Pat.No. 5,053,607 to Carlson et al. shows a point-of-sale system forverifying availability of funds so the merchant can determine whether toaccept a check. Of course, such systems do not guard against asubsequent stop payment order being issued by the customer.

The popularity of these "promises to pay" has also resulted in thegrowth of an entire collection industry devoted to finally collectingdebts represented by checks, credit accounts, and payment agreements incases where the debts have not been timely paid.

When a debt goes unpaid, a merchant or credit issuer may hire acollection agency to seek recovery of the debt. The collection agencygenerally contacts the debtor repeatedly by phone and/or mail in anattempt to obtain payment. Generally, the collection agencies try topersuade the debtor to mail a check to the collection agency in paymentof the debt. Of course, debtors often put off payment with the oft-usedline "the check is in the mail." Even if a check is received, it issubject to dishonor as noted above. Collection agencies may also acceptcredit cards, but many debtors do not have credit cards or do not havesufficient credit to pay the amount due using a credit card. Also, awire service is offered by Western Union™, for example, which allowspersons to pay by cash or check at a remote location and have the fundstransferred to the collection agency, for a substantial fee. This systemrequires that the debtor physically go to a wire transfer office to pay,and is less desirable and effective for that reason.

Because of the substantial manual effort to involved in repeatedlycontacting a debtor, collection agencies are often paid in the form of asubstantial percentage of the amounts collected. Again, this representsa loss to the merchant which must be recovered through increased pricesto future customers.

As noted above, one particular type of debt that often causes collectionproblems is an agreement to make scheduled payments. A variety of goodsand services, such as automobiles, homes, major dry goods, and healthclub memberships, are often purchased on payment plans. Because of therepeated nature of the payments, it is possible that even the mostdiligent payor may, at some point, forget to mail a payment or send itlate. Also, while the mail system in developed countries such as theUnited States achieves a very high delivery rate, it is statisticallyinevitable that some mailed payments will not be delivered.

One solution to the problems of reliably collecting repeated payments isa pre-authorized electronic debit. Many large and well-connectedcreditors, such as banks and the finance arms of automobilemanufacturers, generate monthly tapes of authorized payments which arethen processed electronically within the banking system. Funds arewithdrawn from the checking account of the consumer and transferreddirectly to the creditor. This service has recently been made availableto smaller accounts with a substantial per-transaction charge. However,this electronic banking system is primarily adapted for processingpre-authorized transfers on particular predetermined dates, and depositstherefore cannot be processed entirely at the convenience of theparties. A connection with a bank is needed, which either involvesobtaining and maintaining a direct connection or the use of atransaction processing company. Also, such electronic funds transferscannot be authorized by telephone; a written authorization is legallyrequired, so that immediate authorized collection of a debt cannot beaccomplished by this method.

Other automated payment systems have been developed, but do not achievethe advantages of the present invention. U.S. Pat. No. 5,121,945 toThomson et al. shows a system for generating regular checks, such as forthe payment of utility bills, on customer accounts using a laser printerwith a magnetic toner cartridge. Using stored account information, anauthorized check to the payee is generated by the central system andtransmitted to the payor for approval, signing, and return. While thissystem may be advantageous for the limited purpose disclosed, it doesnot provide a system in which transfers are authorized by telephone andexecuted without mail delays.

U.S. Pat. No. 4,823,264 to Deming shows a system in which a customer canelectronically pay bills using a computer. The customer's computertransmits an order to pay a bill to a central location, and a paperdraft is generated for transmission to the payee. Funds availability maybe verified before generation of the draft. This system requires thatthe debtor have particular computer equipment, and would therefore be inineffective generalized debt collection situations.

U.S. Pat. No. 4,960,981 to Benton et al. discloses a method and systemfor transferring funds in which the customer's signed order to pay istransmitted to the bank by fax. The bank's fax receiver is equipped withcharacter recognition equipment which takes the necessary informationfrom the order, after which the system verifies funds availability andmakes the payment requested if the funds are available. This system canonly be used in cases where the bank involved has the required specialequipment and the customer is present to sign the payment instructions.

Therefore, the inventor believes there is a need for an improved systemand method for collection of debts which can be used for immediatelydebiting a debtor's bank account when the debtor authorizes thiscollection method by telephone.

SUMMARY OF THE INVENTION

Therefore, it is a general object of the present invention to provide amethod for collecting funds from a customer's checking account whenauthorized, without requiring that an executed check be mailed to thepayee.

It is a further general object of the present invention to provide asystem which facilitates authorized generation of a payment order fortransfer of funds from a customer's checking account.

Another object of the present invention is to provide a system forgenerating authorized drafts on a plurality of financial accountsbelonging to a plurality of payors.

A further object of the present invention is to provide a system forgenerated authorized drafts which receives input information sufficientto generate a draft, and which processes the information to produce adraft to be executed by an authorized agent for the payor.

Another object of the present invention is to provide a stand-alonesystem for producing drafts on a plurality of accounts, wherein thesystem includes a laser printer using an MICR toner cartridge.

A further object of the present invention is to provide system forproducing drafts on a plurality of accounts belonging to a plurality ofpersons which receives input information and verifies the information toprevent generation of nonnegotiable drafts.

Yet another object of the present invention is to provide a system forautomatically producing drafts which verifies input bank routing codeinformation by comparing the information to a database of bankidentification information.

A further object of the present invention is to provide a system forautomatically producing drafts which verifies the probable validity ofan account number identifying a financial account.

Another object of the present invention is to provide a draft producingpayment system that identifies high risk drafts and provides anincreased level of verification for such drafts.

A further object of the present invention is to provide a schedulingsystem for automatically scheduling the future production of drafts,including a predetermined limited sequence of drafts or a series ofperiodic drafts.

Still another object of the present invention is to provide a systemwhich automatically generates authorized drafts and which furtherautomatically generates a verification notice to the person authorizingthe drafts.

Another object of the present invention is to provide a geographicallydispersed system for processing drafts in which a plurality of datacollection stations are connected to a central draft production systemwhich generates the drafts.

Another object of the present invention is to provide a draft preductionsystem which has security measures associated with it to reduce thelikelihood of production of unauthorized drafts.

A more particular object of the present invention is to provide a draftproduction system which is designed to produce drafts payable only to apredetermined party, such that the name of the party cannot be readilychanged by a user of the system.

Another object of the present invention is to provide a process forreceiving payments in which an automated draft production system isprovided to produce authorized drafts on the account of a payor,executable by a person other than the payor.

It is also an object of the present invention to provide a process forcollecting a payment in which a payor authorizes withdrawal of fundsfrom the payor's checking account, for example by telephone, a draft isgenerated using an automated draft production system, negotiability ofthe draft is verified, the draft is executed on behalf of the payor, anddeposited to the account of the payment collector.

Still another object of the present invention is to provide a processfor collecting payments in which a payor authorizes withdrawal of fundsfrom the payor's checking account, for example by telephone, a draft isgenerated using an automated draft production system, the draft isexecuted on behalf of the payor, and deposited to the account of thepayment collector, in which the authorizations are received at aplurality of geographically dispersed locations and transmitted to acentral service location for generation of the drafts.

Other objects of the present invention will be apparent to those skilledin the art upon review of the specification, drawings, and claims of thepresent invention.

These objects and others are achieved according to the present inventionby providing a system and method of collecting debts in which anautomated processing system generates a draft, payable to the creditorand drawn on the debtor's checking account, pursuant to the debtor'sauthorization. The draft is then executed by the debt collector asauthorized signatory for the debtor, and deposited into the creditor'saccount. The automated system used to generate the drafts in thepreferred embodiment has a simple input screen which receives thenecessary information for generation of the draft, which in thepreferred scenario is read to the system operator over the telephone bythe debtor who has authorized the payment. The system then immediatelyverifies the bank and account information by comparing the inputinformation to the data in a bank information database associated withthe system. This verification process ensures that any errors intransmission of the account identification information can be rectifiedduring the conversation with the debtor. Optionally, after verifying theaccount information, the system may generate an inquiry to the bank todetermine the availability of funds in the debtor's account. When allverification is complete, the system generates a paper bank draftpayable to the creditor, using MICR ink so that the draft can beprocessed in the banking system like an ordinary check. The signatureblock of the draft is made for the collection agent "as authorizedsignatory for" the debtor. In this manner, it is possible to obtainauthorization for payment of a debt in a telephone conversation with thedebtor and to immediately deposit the debtor's authorized draft to beginthe payment process, without depending on the debtor and the mail systemto deliver a signed payment order to the creditor's collection agent.

This system and method is particularly advantageous in automating theprocessing of debts by collection agencies, and as a payment alternativeto credit cards and COD deliveries for goods and services ordered bytelephone. Finally, this system and method can be used advantageouslyfor regular payment generation by businesses whose pre-authorizedpayments are not regular enough to justify regular mass electronic fundstransfers.

BRIEF DESCRIPTION OF THE DRAWINGS

FIG. 1 is a diagram of the hardware used in a preferred embodiment ofthe present invention to generate drafts on a customer bank account;

FIG. 2 is a flow chart showing a preferred embodiment of the automatedcollection method according to the present invention;

FIG. 3 is a representation of the main menu display in the preferredembodiment of the invention;

FIG. 4 is a representation of the main data entry screen according tothe preferred embodiment of the invention;

FIG. 5 is a representation of the screen display when postdated draftinstructions are entered in the system;

FIG. 6 is a representation of the screen display showing an errormessage indicating an invalid bank identification number;

FIG. 7 is a diagram of the screen display showing a zip code errormessage;

FIG. 8 is a diagram of an additional preferred embodiment of the presentinvention in which computer systems are provided at a plurality oflocations to collect and verify draft data and the data is thentransmitted to a central service bureau for production of the drafts;

FIG. 9 is a block schematic diagram of the software structure in apreferred embodiment of the present invention; and

FIG. 10 is a sample draft generated according to a preferred embodimentof the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS

In general, as described above, the present invention provides a systemand method of collecting payments in which an automated system generatesa draft, payable to the payee and drawn on the payor's checking account,pursuant to the payor's authorization. The draft is then executed by thepayee's collector as authorized signatory for the payor, and depositedinto the payee's account. The automated system used to generate thedrafts in the preferred embodiment has a simple input screen whichreceives the necessary information for generation of the draft, which ina typical scenario will be read to the system operator over thetelephone by the payor who is authorizing the transfer. The system thenimmediately verifies the bank and account information by comparing theinput information to the data in a bank information database associatedwith the system. This verification process ensures that any errors intransmission of the account identification information can be rectifiedduring the conversation with the payor. Optionally, after verifying theaccount information, the system may generate an inquiry to the bank todetermine the availability of funds in the payor's account. When allverification is complete, the system generates a paper bank draftpayable to the creditor, using MICR ink so that the draft can beprocessed in the banking system like an ordinary check. The signatureblock of the draft is made for the collection agent "as authorizedsignatory for" the payor. In this manner, it is possible to obtainauthorization for payment of a debt in a telephone conversation with thepayor and to immediately deposit the payor's authorized draft to beginthe payment process, without depending on the payor and the mail systemto deliver a signed payment order to the payee's collection agent.

Referring first to FIG. 1, the present invention is implemented, in afirst preferred embodiment, using a localized computer system 100comprising a personal computer 102 and a display screen 104, keyboard106, and printer 108 connected to personal computer 102. Printer 108 ispreferably a laser page printer such as any of the printers sold underthe trademark Laserjet™ by the Hewlett-Packard company. Printer 108operates using a toner cartridge 110 installed in printer 108, and thetoner cartridge is of the type which prints with magnetically chargedink which can be read by Magnetic Ink Character Recognition (MICR)equipment used by the banking system's automated check clearing centers.These MICR toner cartridges can be obtained from a number of sources,for example LaserScript division of Matrix Technology, Inc., 7129 BanjoCt., Columbia, Md. 21045; or MICR Tech Group, Inc., P.O. Box 152,Brownstown, Ind. 47220. The cartridge used should be one selected forcompatibility with the brand and model of printer 108 being used.Personal computer 102 may be an IBM™ compatible personal computerincorporating an INTEL 80X86™ microprocessor and running the MicrosoftMS-DOS™ operating system or another of the various operating systemsadapted to work on this class of computer. Of course, those skilled inthe art will appreciate that the system can also be implemented on avariety of personal computers, minicomputers, or mainframe computers,using a variety of printers, and the invention is not limited to theparticular hardware disclosed in this preferred embodiment.

The system 100 can be operated with a single input workstation as shownor multiple input workstations can be provided. If multiple inputworkstations are used, the software in the system will be designed formultiuser access. For example, record locking protocols may beimplemented.

The computer 102 is optionally provided with a fax modem 112 which canbe installed internally in computer 102 and is connected to an outgoingtelephone line (not shown). Fax modem 112 may be a JT FAX Board made byHayes Microcomputer Products, Inc. of Atlanta, Ga. Fax modem 112 permitssoftware operating in computer 102 to electronically generate fax imagesand to subsequently dial a remote fax machine and transmit the image tothe remote machine. As will be explained in more detail later, this faxmodem may be used in the preferred embodiment of the present inventionto generate and deliver a letter of inquiry to the debtor's bank todetermine whether the debtor's account is in good standing and hassufficient funds to make payment on an authorized draft.

The system disclosed herein can be advantageously used as part of a debtcollection process in which the debtor is contacted by a collectionagent over the telephone and, if willing to pay, is asked to authorizegeneration and presentation of a draft on the debtor's checking account.The debtor's name, address, telephone number, description of the debt,and the amount are typically already known to a collection agent. In thecase of use of this system for mail or telephone orders of goods andservices, this information will be obtained by the person receiving theorder and entered in the system. The remaining input informationdescribing the desired draft transaction, particularly the ABA number,account number, and next check number, is obtained from the debtor,usually by having the debtor read off the numbers on the bottom of oneof debtor's checks. The next check number in debtor's check sequence isobtained and the debtor is instructed to destroy the existing checkbearing that number. After processing by the check clearing housesystem, the draft generated will appear in the debtor's bank accountstatements as a numbered check and the paid draft will be returned todebtor with his or her other checks depending on the policy of debtor'sfinancial institution.

For convenience, the person operating the system will generally bereferred to herein as a "collection agent" and the payor will bereferred to as the "debtor." However, it should be recognized that thepresent system and method can be used not only to collect preexistingdebts, but as a payment mechanism for telephone or other sales. In thiscase, the person authorizing the draft will be a customer and the systemoperator will be an order processor. Also, for convenience the financialinstitution holding the debtor's account will generally be referred toas a bank, but it should be understood that this financial institutionmay be a savings and loan, credit union, brokerage firm, investmentfirm, or money market account issuer, or any other institution public orprivate upon which the debtor may lawfully issue an instruction to payfunds to a designated party.

The software program operating on computer 102 is preferably menudriven. FIG. 3 shows a preferred main menu for the software program. Ascan be seen by reference to FIG. 3, the functions of the softwareaccessible from the main menu preferably include entering new draftproduction (check) information; entering information for production of aseries of drafts on the same account; editing drafts currently scheduledfor production and deposit; editing drafts scheduled for futureproduction and deposit; viewing or deleting the draft informationrecorded in the system; viewing records (archival information) of pastdrafts produced by the system; printing drafts; performing systemutility functions; and ending execution of the program.

The system utilities selection on the main menu preferably producesdisplay of a utility menu which provides a number of system managementfunctions. For example, these functions preferably include re-indexingof databases associated with the system, data backup functions, securityfunctions such as changing authorized passwords for system operation,updates to databases such as the zip code database and the ABA database,system configuration functions such as selecting the port to which theprinter is connected, the type of printer, etc.; setup of the facsimileverification functions, purging stored records such as records ofarchived checks, and other desired system management functions.

The software preferably operates generally according to the flow chartof FIG. 2. As shown in FIG. 2, in block 202 the necessary information tospecify the draft is entered in the computer 102 as part of aninformation entry process, preferably during the course of theabove-described telephone conversation with the debtor. Specifically, inblock 202 transaction information is input into the computer 102 (shownin FIG. 1). This transaction information is preferably input using thekeyboard 106 (shown in FIG. 1). In performing the step of block 202,screen 104 (shown in FIG. 1) will preferably display a data entry screensuch as that shown in FIG. 4. As can be seen in FIG. 4, the transactioninformation preferably includes the name and address of the debtor, thenext check number in sequence for the debtor's account, the date of thedraft, the amount of the draft, a memo entry describing the debt, anAmerican Banking Association (ABA) bank identification number specifyingthe bank or other financial institution holding the debtor's checkingaccount, and the number of the debtor's checking account.

The information entry process in block 202 may also include theScheduling of future payments for which drafts are to be generated bythe system. FIG. 5 shows a screen display which permits entering offuture payments to be generated. Preferably, there are several modes forentry of future payments. In a first mode, payments of the same amountare scheduled regularly at predetermined intervals in the future, andgeneration of drafts will continue at the defined intervals until thesystem is instructed to discontinue the payments. In a second mode, oneor more payments of varying amounts may be scheduled for defined datesin the future. These features are particularly useful in severalsituations which may be encountered by the system operator.

As a first example, when contacted regarding overdue debts, debtorsfrequently indicate a desire to pay at a future date when funds areexpected to be available. For example, the debtor may offer to pay $50of a $120 debt on the next Friday when the debtor will receive apaycheck, and may agree to pay the remaining $70 due two weeks later,upon receipt of his or her next paycheck. Since the system permits thescheduling of a plurality of future drafts at any desired dates, andwith varying amounts, the system readily accommodates suchdebtor-creditor arrangements.

As a second example, the system can be used as a payment system for asale which requires periodic payments, e.g. a health club membership forwhich monthly dues are paid. In this case, the purchaser may agree thata draft for a defined amount, for example $19.95 a month, will beautomatically submitted on an agreed day each month in payment of dues.The system will be programmed to automatically generate this draft eachmonth until different instructions are received. For example, if thecustomer wishes to discontinue the membership, the system operator wouldinstruct the system to cease regular production of drafts on thecustomer's account.

As a third example, the system can be used to generate regular periodicpayments of different amounts. For example, a customer of a serviceusing this system might authorize automatic payment of monthly utilitybills by the service. The payments in this case would be periodic, butthe system would require entry of a varying amount for each draft to begenerated. For such uses, the customer might advantageously provide ageneral authorization to generate periodic drafts in the amount owedeach period, and this information might be automatically transferredfrom a billing records system to the system of the present invention toinitiate generation of the drafts in the proper amount. It mayfrequently be desirable to interface the system of the present inventionwith billing, accounting, or other programs used by the payee. Forexample, such an interface can be accomplished by transferring batchprocessing or information files between the present system and thebilling or accounting programs by writing the files to a mass storagedevice or through an interface program such as Microsoft Windows™.

The information entered to define future (postdated) drafts will bestored for future use as described further below with respect to block212 of the flow chart.

As the information is entered in block 202, or immediately after entryis completed, the information given is preferably verified againstappropriate databases and checking algorithms associated with thecomputer 102, as shown in blocks 204, 206, and 208. In block 210, anywarning messages determined by the verification process will bedisplayed to the operator. It should be noted that the display of thesewarning messages is shown in a single flow chart block for convenience,and the verification functions can be performed, and the warningmessages displayed, immediately after data entry has been entirelycompleted. However, it may also be desirable to have each dataverification function performed during the information entry process, asthe relevant data item is entered, and to immediately display a warningmessage if the item just entered is erroneous.

In conjunction with the software which performs the verificationfunction, the databases and algorithms provided are a verification meansfor immediately checking the validity of the data entry.

As a first step in the verification process, the ABA number entered toidentify debtor's financial institution is validated by comparison withthe entries in a financial institution database having a record of eachauthorized ABA number, as shown in block 204 of FIG. 2. This financialinstitution database is preferably constructed from records which eachdescribe a financial institution, and include the financialinstitution's ABA number, name, address, telephone number, and faxnumber. If the ABA number is found in the database, the software programdisplays the financial institution name and address on the screen ofFIG. 4 so that the collection agent can verify the correctness of thisinformation with the debtor. If no matching ABA number is found, awarning message will be provided to the collection agent operating thesystem according to the function of block 210 and as illustrated in FIG.6. This message indicates that the ABA number is believed to be invalid.Although the system preferably provides a method for overriding thiserror detection and using the suspect bank identification number,generally the collection agent will ask the debtor to re-read the bankidentification information on the bottom of debtor's check so that acorrected financial institution identification number can be entered.

In this way, the present invention provides particular advantages in thecontext of a process for quickly generating one-time paymenttransactions. This verification process provides an opportunity toverify the accuracy of essential transaction processing information at atime when the debtor is still on the line and can provide correctedinformation if necessary. In this way, returned drafts and associatedfees assessed by the creditor's financial institution can be avoided.This verification process can be achieved using a local computer systemwithout any direct hookup to electronic banking information networks.

Referring again to FIG. 2, a further verification step may be performedon the account number as shown in block 206. Many financial institutionslimit the account numbers used to numbers which meet the requirements ofa particular predetermined algorithm, e.g. all account numbers may bedivisible by a predetermined number or the sum of the digits may have apredetermined characteristic. If the financial institution databaseassociated with computer 102 is provided with information defining suchaccount number verification algorithms for the financial institutioninvolved, the validity of the account number can be verified and animmediate warning issued to the collection agent if an invalid accountnumber is suspected.

Further verification functions may be performed upon operator entry ofthe debtor's zip code as shown in block 208 of FIG. 2. In oneembodiment, a database associating all valid zip codes with theirassociated city and state names may be associated with computer 102, andthe entry of the zip code may result either in the display of debtor'scity and state for verification with the debtor, or may result in anerror message indicating that the zip code appears to be incorrect, asshown in FIG. 7.

Referring again to FIG. 2, in another preferred embodiment, the zip codedatabase may include empirical or statistical information on theprevalence of check fraud originating in that zip code. This informationwill be particularly useful in cases where the present system is used asa payment mechanism for mail or telephone orders. If the debtor's zipcode is one which has experienced a high proportion of check fraud orbad checks, an indication can be generated to the system operator, andadditional verification procedures can be implemented. Additionalinformation could be requested from the debtor, or the collection agentmight take steps to insulate against nonpayment of the draft, such asverifying funds availability directly with the debtor's financialinstitution or obtaining a check guarantee from a firm specializing insuch transactions. To achieve more precision than can be obtained merelyfrom a zip code check, a database of overdrawn account numbers and namesand addresses of bad check passers may also be provided, and a matchwith an entry in this database could similarly be used to produce awarning to the collection agent to take protective action, such as oneor more of the techniques suggested above.

Following completion of the verification functions, as shown in block210 in FIG. 2, the system will display any appropriate messages to theoperator indicating possible errors in data entry or in the informationreceived from the payor. In the flow chart, this function is shown in asingle block after the verification steps, but it may be even morepreferable to display appropriate messages immediately following eachverification step to provide feedback to the operator as soon as anincorrect entry has occurred. The display of error indications couldalso occur at a time after data entry, for example, as part of anexceptions report for a large batch of drafts being printed.

In the next step, as shown in block 212, transaction informationdefining the draft to be produced may be stored in the computer 102,preferably in a mass storage device associated therewith. Theinformation defining each draft printed is preferably permanentlyarchived for future reference in case of any question or dispute.

As noted above, it is also possible to schedule future payments usingthe system according to the present invention. For example, the systemmay be programmed to generate postdated drafts or a series of regularperiodic drafts. These postdated drafts can be printed immediately andheld for deposit by the operator until their effective date, or datadefining the postdated drafts can be stored in the storage step of block212 and the program can operate to schedule production of postdateddrafts and activate the printer to print the drafts on the date thedrafts are desired.

Once data defining postdated drafts is stored, the drafts can be viewedand edited in any desired manner, or even deleted, prior to their actualgeneration, as noted previously in the description of the main menufunctions. For example, if a series of drafts has been scheduled and thepayor changes banks or account numbers, the corrected information forthe draft can be entered at a later date through the editing functionbefore the drafts are generated. As another example, an authorization ofa series of drafts can be deleted using the delete function on the mainmenu.

As part of the function of printing drafts and scheduling drafts inadvance, the software will preferably automatically generate a standardform written notice letter to the payor listing the amount and date ofthe drafts which will be presented for payment. The written notice mayinclude a form part including language authorizing the transaction anddesigned to be signed and returned to the payment collector to provide awritten authorization for making a draft or drafts on the payor'saccount. This notice can be printed on the printer 108 or, preferably onanother printer (not shown) associated with the system which is loadedwith paper appropriate for correspondence.

Referring again to FIG. 2, the system may automatically take action inblock 214 to verify the availability of funds in the payor's account.This verification operation is particularly important in the case ofone-time transactions, for which the present system and method areparticularly applicable. The payor may be a person with a questionablecredit record, in cases where the system is used by a collection agency,or the payor may be a new customer and have an indeterminate record incases where the system is used for telephone order taking, such as inresponse to television advertising or mail order catalogs.

The funds verification process executed by the system may take anydesired form, but two forms in particular are preferred in the presentinvention. In the first preferred embodiment, a fax letter isautomatically generated and transmitted to the payor's financialinstitution, identifying the payor and the account number, indicatingthe amount of the transaction authorized, and requesting that thefinancial institution immediately contact the system operator(preferably at a toll-free number or by a collect call) if sufficientfunds are not available or the payor's account is not open and in goodstanding. The fax letter may be based on a standardized form letter, andthe payor, account, amount, and bank identification information are theninserted in the form letter automatically by the program from the draftproduction data whenever this fax verification feature is enabled by theoperator or by programming of the system. The bank's fax number may beobtained from the financial institution database associated with thesystem, and the program uses the fax modem 112 (shown in FIG. 1) toautomatically transmit the fax letter to the bank. Thus, the generationand transmission of this fax letter is entirely electronic and automaticand does not require any intervention from the operator. The timing ofthe transmission of the fax letter can also be controlled by theoperator through a screen entry or by the system through predeterminedcriteria. For example, it may be desirable to store a record offacsimiles to be transmitted and to then transmit these faxes duringevening, nighttime or weekend hours when lower telephone rates are ineffect.

In a second embodiment of the funds verification function of block 214,the system may be selectively connected using fax modem 112 (shown inFIG. 1) to one of the central clearing houses or databases capable ofproviding on-line check authorization or check guarantees. In thisembodiment, the software of the present invention would automaticallyconnect to the check verification service and transmit appropriate draftinformation as part of an inquiry to determine whether sufficient fundsare available. The software may also compare the payor and/or accountinformation to a "negative database" listing names and addresses, socialsecurity numbers, account numbers, or other identifying information ofpersons who have drawn bad checks. Any or all of these methods can beused. If insufficient funds are available or the account does not existin good standing, the system may then automatically generate anindication to the operator.

These funds verification functions may be selectively enabled anddisabled by the operator based on predetermined criteria, or may beautomatically enabled and disabled by the system based on predeterminedcriteria, for example the lack of payment history with the particularcustomer or the use of a suspect zip code.

When a draft is to be produced, either because the system is operated inan immediate production mode or because production of current"postdated" drafts has been requested by the operator, the softwareoperates to format the drafts as shown in block 216 of FIG. 2. Theformatting of the draft is accomplished according to a predetermineddraft design programmed into the system. The system determines thelocations for printing of data on the draft, and the size and fonts tobe used for each data item. A sample draft is shown in FIG. 10 indicatedby the reference number 1000. The draft includes the payor's name andaddress 1002, the date and the payor's sequential check number, payeedesignation 1004, financial institution identification 1006, the amount1008, a memo line 1010, automated clearing house information 1012, andsignature block 1014. The payee designation 1004 is preferably hardcoded into the system and cannot readily be changed. Similarly, thesignature block 1014 is predetermined and cannot be changed by theoperator.

As another option, a plurality of predetermined payees and signatureblocks may be coded into the system, and the system may be programmed toselectively switch between the payees for production of differentdrafts. This feature accommodates the use of a single system to makecollections for several companies. What is important is that the payeesof the system be limited to predetermined payees so that a dishonestperson gaining access to the system cannot generate unauthorized draftspayable to that person or to some entity controlled by that person.

The automated clearing house information 1012 is printed in amachine-readable font compatible with automated check clearing systems,according to standards promulgated by the American Banking Association.This automated clearing house information 1012 includes the financialinstitution's identification number, the account number, the checknumber, and may also include the amount. Each field is separated bydesignated field identification characters, according to the appropriateABA check printing standards.

Preferably, the system operates to place the check number in varyinglocations within the automated clearing house information depending onthe practice of the financial institution involved. For example,personal checks drawn on banks usually have the check number at the endof the data line. Business accounts usually have the check number infront of the bank routing number, and credit unions usually place thecheck number between the routing number and the account numberinformation. In one embodiment, the placement of the check number isdetermined by an operator input. In another embodiment, informationdefining the placement of the check number can be included in the bankinformation database associated with the system and the proper placementof check numbers can be determined automatically by the system throughreference to the database.

The signature block 1014 of draft 1000 is generated for a signatureother than the signatures under which the bank is normally authorized topay drafts, i.e. a signature other than the payor's. Preferably, thesignature block is prepared for the payee or an agent, acting "asauthorized signatory for" the payor. In this case, the payee or an agentof the parties would execute the draft on behalf of the payee.Alternatively, the system could be programmed to print marks legallyeffective as a "signature" on the draft, eliminating the need for anymanual signing.

This formatting of the draft may be accomplished immediately followinginput of the draft defining information, or more preferably the draftinformation may be permanently archived and/or temporarily stored in amore compact form. Formatting, in terms of positioning of informationand fonts, may then be performed immediately prior to printing of thedraft.

The formatted data is then transmitted to the draft printer as shown inblock 218 of FIG. 2 to produce a draft output as shown in FIG. 10. Thedraft is preferably printed on security paper of the type with abackground pattern that makes the occurrence of erasures or othermodifications apparent. As noted before, the entire draft, or at leastthe portion of the draft which will be read by automated characterrecognition equipment at automated check clearing houses, may be printedin ink which is compatible with these systems. Presently, an ink havinga magnetic component is used in these systems, and this ink should beused when producing a draft to be automatically processed.

Security functions are particularly important in the present inventionsince there is a clear potential for misuse of this invention if thesystem is designed improperly and access to the system 100 is obtainedby dishonest persons. However, the preferred embodiment has severalfeatures which prevent unauthorized persons from generating unauthorizeddrafts payable to themselves. First, the system is preferably providedwith password protection so that access to the draft printing functionscannot be obtained by unauthorized persons. As a second level ofdefense, the software is preferably encoded so that each copy of thesoftware will print only drafts payable to a predetermined payee. Thatis, the payee is hard-coded into the program and cannot be readilychanged even by an authorized user of the system. Generally, thepredetermined payee will be the company operating the system.Preferably, the coding of the payee into the program will not be in asequential ASCII format which could be readily reviewed and changed by aperson with even limited knowledge of computers. The payee informationis preferably encoded using a code operator and/or scrambled anddispersed through the program file, so that modification of the payeewould require decompiling and extensive study of the program. Thisfeature removes the incentive for fraud by ensuring that any fraudulentdrafts printed will be payable to the order of the company, rather thanbeing payable to any individual operator.

The system of the present invention has heretofore been described interms of a stand-alone system which receives data entry and printsdrafts. However, further security advantages are obtained in anotherpreferred embodiment, shown in FIG. 8, in which the draft printingfunctions are performed in a central secure location. As shown in FIG.8, the computer 102 and associated screen 104 and keyboard 106 areplaced in a first location 800. In this embodiment, it will be desirableto provide a plurality of computers 102 and associated components indispersed locations 800. The computer 102 is connected through fax modem112 to a telephone line 801, which is a means for establishing a datatransfer connection between computer 102 and a computer 802 in alocation remote from location 800. Computer 802 is connected to printer108 with magnetic ink cartridge 110, which prints drafts in response todata received from computer 102 over telephone line 801. The functionsdescribed previously for computer 102 with reference to FIG. 2 can bedivided between computers 102 and 802 in any desired manner. Forexample, only the data entry functions might be performed at computer102 and the data transmitted to computer 802 for performance of allother functions. However, it has been found to be particularlyadvantageous to divide these functions so that the data entry andverification functions (blocks 202-210 of FIG. 2) are performed incomputer 102 at location 800 and the draft formatting and printingfunctions (blocks 216-218 of FIG. 2) are performed in computer 802. Thefunctions of storing future transactions and verifying fundsavailability (blocks 214-216 of FIG. 2) can be performed in eitherlocation depending on staffing and the organization of the system users.

Variations on this embodiment are also possible. In particular, the datatransfer connection means between computer 102 and computer 802 need notbe a telephone line, but could be any data transfer system, including alocal area network, packet switching system, cellular telephone, radiotransmission system, satellite transmission system, infraredtransmission system, diskette or other mass storage transfer, or othermethod of transferring data from one location to another. Also, dataverification functions might be performed at computer 102 and repeatedby computer 802 before computer 802 prints the draft.

In another desirable embodiment, the central computer 802 may receivedraft information in a batch file which can be transmitted by acommunications link, by diskette, or other means of transferring data.The batch file will contain the information necessary to generate atleast one and generally a large number of drafts. The central computer802 will preferably verify the data for each draft in the batch filebefore printing the draft and will display or print out an exceptionreport listing any drafts which could not be processed because ofincorrect bank routing numbers or other criteria which were not metduring the verification process. Preferably, the data is also verifiedat the time of original entry so that the operator can correct erroneousdata before processing of the drafts. However, the verification processmay take place at either or both times and locations within the scope ofthe present invention.

The timing of the transfer of data from computer 102 to computer 802 canbe adjusted to achieve particular desired advantages depending on theuse of the system. The data defining each draft can be transferred tothe computer 802 immediately upon collection of the data, or the datafor a draft can be stored and transmitted to computer 802 as part of amass transmission of a group of drafts to be printed. As an example, thedraft information could be transmitted, and drafts printed, at the endof the business day or at a predetermined number of times during abusiness day.

The software program according to the present invention can be designedaccording to a number of schemes, using a variety of languages andplatforms as will be appreciated by those skilled in the art, and theinvention is in no way limited to the embodiment of the softwaredisclosed herein. In a preferred embodiment illustrated in the blockdiagram of FIG. 9, the software design includes a front end processingprogram 902 which is a customized database program implemented in astandard database platform. One suitable platform is Clipper™ sold byComputer Associates of San Jose, Calif. Source code for a Clipper-basedfront end program 902 according to the present invention is provided inthe software appendix. Generally, this program implements the softwarefunctions (see flow chart of FIG. 2) by providing menu functions 903,including data entry functions, and an interface to the requiredverification data files 905. When drafts are to be printed, the maindatabase program preferably passes control to a font/formatting program904 which may be Page Garden™ software manufactured by Block Publishing,800 S.W. 37th Ave., Suite 765, Coral Cables Fla. 33134, or any otherappropriate font and formatting control platform. Generally, thefont/formatting program 904 receives draft production data from thedatabase program 902 in the form of an output file such as an ASCIIformatted file. The font/formatting program 904 will then format andarrange the input data in an appropriate form for output as a formatteddraft. In particular, font/formatting program 904 will place the dataitems in the appropriate line and column on the draft, downloadappropriate fonts to an attached printer as required to print the draft,and produce commands to select these fonts during printing so that thevarious information items on the draft appear in an appropriate manner.

A particularly desirable function of the font/formatting program is theprovision of a standard bank number font which is recognized byautomated check processing equipment, and the printing of the ABAnumber, check number, account number, and optionally the amount, in theproper format at the bottom of the draft according to ABA standards forchecks. As noted above, it will be preferably to connect the output offont/formatting program 904 to a printer that will print at least thisbank processing information using magnetic ink, or other printingstandards which may be developed to enhance automated check clearinghouse operations.

While the font/formatting functions may be most easily implemented usinga platform designed for this general purpose such as the Page Gardenprogram described above, these printing control functions could also beprogrammed into the database program 902 or a custom output formattingprogram could be used.

The main database program 902 is also connected to selectively initiateoperation of fax control program 906. Fax control program 906 ispreferably software provided as part of fax modem 112 (shown in FIGS. 1and 8). Fax control program 906 preferably operates from a DOS commandline interface and the main database program 902 is programmed to spawna DOS shell and execute the desired functions. Fax control program 906operates when activated to receive a data file defining a fax image anda destination telephone number, and then activates fax modem 112 (shownin FIGS. 1 and 8) to dial the desired telephone number and transmit thespecified fax image. This functionality is used in transmitting afacsimile verification request to a financial institution as describedpreviously. Specifically, after entry of the data defining a draft, faxverification may be indicated, either by selection of the operator orbecause certain criteria are met, such as the transaction originating ina particular area or the payor having either a nonexistent or poorpayment history with the creditor.

When fax verification is indicated, database program 902 will access therecord in data files 905 defining the financial institution which holdsthe debtor's account. Typically, this record will already be availableto the database program 902 since this record is used to verify the bankidentification numbers as described previously. The database program 902will obtain the fax number of the financial institution from the datarecord and will pass this fax telephone number to fax control program906. The database program 902 will also insert key data describing thedebtor, the debtor's bank account number, and the amount of the proposeddraft into a form letter file to create a letter image for faxtransmission to the financial institution. This letter image file isthen transmitted to the fax control program 906 and transmitted to thedestination fax machine.

Thus, a system and method has been disclosed which quickly generates andprocesses authorized drafts on a debtor's account at a financialinstitution to effect payment of debts.

In its use as a tool for collection of debts, the present systemprovides a clear advantage over prior art systems in that payment can bedrawn from the account of a debtor immediately upon a telephoneauthorization from the debtor. The system can be constructed atrelatively little expense as a stand-alone system that is practical foruse by small agencies and companies who normally do not have access toelectronic funds transfer systems.

The system also provides significant advantages for businesses seekingan improved method of receiving payment for goods and services orderedby telephone. The system avoids the disadvantages of cash-on-deliveryarrangements and eliminates the delay in completion of the transactioninherently required if the customer must mail a check to the seller toinitiate shipment of the goods or performance of the services. Also, asa payment method, this system offers advantages similar to those foundin the use of credit cards, but does not require that the purchaser havea credit card. Figures from the American Banker's Association show thatonly 80 million Americans have access to a credit card, but over 183million have checking accounts. Therefore, the present system and methodimproves access to mail order goods and services for those who do nothave a credit card. Finally, by generating the draft at the payeelocation rather than the payor location, the present system and methodreduces postage costs and prevents lost mail by providing immediatedelivery of the draft to the payee.

I claim:
 1. An automated computer-based apparatus for generating aplurality of authorized drafts on financial accounts belonging to aplurality of payers, the drafts payable to one of a fixed set of one ormore payees, comprising:input means for performing an electronicinformation input process wherein information is obtained specifying anew payer previously unknown to the apparatus and a draft to begenerated on an account of that payer, said information including afinancial institution identification number, payer account identifier,and an amount to be drafted from said payer's account; processing meansconnected to said input means for receiving said input information andprocessing said information to format a draft on said financial accountpayable to said payee, said draft format including identification ofsaid financial account, identification of said financial institutionholding said financial account, and an instruction to pay said amount tosaid payee including particular identification of said payee, andfurther including a signatory block for an authorizing indicia otherthan said payer's signature; and output means for transferring saiddraft formats to an external printing means connectable to saidprocessing means for generating a copy of said drafts; wherein saidapparatus is implemented using software which incorporates securitymeasures for preventing fraudulent draft production, said securitymeasures comprising the hard coding of said payee identificationinformation in said software so that payee information appearing on saiddrafts cannot be readily modified by a person gaining access to saidinput means.
 2. The apparatus of claim 1 wherein said hard coded payeeidentification information is coded in a format other than a sequentialASCII format.
 3. The apparatus of claim 1 wherein said hard coded payeeidentification information is dispersed through the program file.
 4. Theapparatus of claim 1 wherein a code operator is applied to said hardcoded payee identification information.
 5. The apparatus of claim 1wherein said hard coded payee identification information is scrambled.6. The apparatus of claim 1 wherein said security measures furthercomprise means for requiring an authorized password for obtaining accessto draft printing functions.
 7. An automated computer-based apparatusfor generating a plurality of authorized drafts on financial accountsbelonging to a plurality of payers, each draft payable to a payee,comprising:input means for performing an electronic information inputprocess wherein information is provided specifying a new payerpreviously unknown to the apparatus and a draft to be generated on anaccount of that payer, said information including a financialinstitution identification number, payer account identifier, and anamount to be drafted from said payer's account; processing meansconnected to said input means for receiving said input information andprocessing said information to format a draft on said financial accountpayable to said payee, said draft format including identification ofsaid financial account, identification of said financial institutionholding said financial account, and an instruction to pay said amount tosaid payee including particular identification of said payee, andfurther including a signatory block for an authorizing indicia otherthan said payer's signature; output means for transferring said draftformats to an external printing means connectable to said processingmeans for generating a copy of said drafts; wherein said apparatus isimplemented using software which incorporates security measures forpreventing fraudulent draft production, said security measurescomprising the hard coding of said payee identification information insaid software so that payee information appearing on said drafts cannotreadily be changed even by an authorized user of the apparatus.
 8. Theapparatus of claim 7 wherein said hard coded payee identificationinformation is coded in a format other than a sequential ASCII format.9. The apparatus of claim 7 wherein said hard coded payee identificationinformation is dispersed through the program file.
 10. The apparatus ofclaim 7 wherein a code operator is applied to said hard coded payeeidentification information.
 11. The apparatus of claim 7 wherein saidhard coded payee identification information is scrambled.
 12. Theapparatus of claim 7 wherein said security measures further comprisemeans for requiring an authorized password for obtaining access to draftprinting functions.
 13. An automated apparatus for collecting funds bygenerating a plurality of authorized drafts on financial accountsbelonging to a plurality of payers, the drafts payable to one of a fixedset of one or more payees, comprising:input means for performing anelectronic information input process wherein information is provided byan authorized operator, specifying a new payer previously unknown to theapparatus and a draft to be generated on an account of that payer, saidinformation including a financial institution identification number,payer account identifier, and an amount to be drafted from said payer'saccount; payee definition means for establishing said fixed set of oneor more payees to which said draft may be made payable, prior to saidelectronic information input process; processing means connected to saidinput means for receiving said input information and processing saidinformation to format a draft on said financial account payable to saidpayee, said draft format including identification of said financialaccount, identification of said financial institution holding saidfinancial account, and an instruction to pay said amount to said payeeincluding particular identification of said payee, and farther includinga signatory block for an authorizing indicia other than said payer'ssignature; output means for transferring said draft formats to anexternal printing means connectable to said processing means forgenerating a copy of said drafts payable to a payee within said fixedset of payees identified by said payee definition means; and securitymeans associated with said vary definition means for preventing a personaccessing the apparatus as said authorized operator from changing saidpayee identification information to identify a payee outside the fixedset of payees.
 14. The apparatus of claim 13 wherein the apparatus isimplemented using a computer program and said security means compriseshard coding payee identification information in said program.
 15. Theapparatus of claim 14 wherein said payee identification information iscoded in a format other than a sequential ASCII format.
 16. Theapparatus of claim 14 wherein said hard coded payee identificationinformation is dispersed through the program file.
 17. The apparatus ofclaim 14 wherein a code operator is applied to said hard coded payeeidentification information.
 18. The apparatus of claim 14 wherein saidhard coded payee identification information is scrambled.
 19. Theapparatus of claim 14 wherein said security measures further comprisemeans for requiring an authorized password for obtaining access to draftprinting functions.
 20. An automated apparatus for collecting funds fromdebtors by generating a plurality of authorized drafts on financialaccounts belonging to a plurality of payers, the drafts payable to acompany operating the apparatus, comprising:input means for performingan electronic information input process wherein a system operator entersinformation specifying a new payer previously unknown to the apparatusand a draft to be generated on an account of that payer, saidinformation including a financial institution identification number,payer account identifier, and an amount to be drafted from said payer'saccount; processing means connected to said input means for receivingsaid input information and processing said information to format a drafton said financial account payable to said company, said draft formatincluding identification of said financial account and identification ofsaid financial institution holding said financial account; output meansfor transferring said draft formats to an external magnetic printingmeans connectable to said processing means for generating a paper copyof said drafts using magnetically encoded ink and printing fontscompatible with clearing house check processing equipment; payeeidentifying means for providing payee identification information on theprinted draft instructing that payment be made to the company, and forproviding a signatory block for an authorizing indicia other than saidpayer's signature; and security means for preventing a person gainingaccess to the apparatus from changing said payee identificationinformation to identify a payee other than the company operating theapparatus, wherein the apparatus is implemented using a computer programand said security means comprises hard coding payee identificationinformation in said program.
 21. The apparatus of claim 20 wherein saidpayee identification information is coded in a format other than asequential ASCII format.
 22. The apparatus of claim 20 wherein said hardcoded payee identification information is dispersed through the programfile.
 23. The apparatus of claim 20 wherein a code operator is appliedto said hard coded payee identification information.
 24. The apparatusof claim 20 wherein said hard coded payee identification information isscrambled.
 25. The apparatus of claim 20 wherein said security measuresfurther comprise means for requiring an authorized password forobtaining access to draft printing functions.
 26. An automated debtcollection system for generating a plurality of authorized drafts onfinancial accounts belonging to a plurality of payers, the draftspayable to a fixed set of one or more payees, comprising:input means forperforming an electronic information input process wherein a systemoperator enters information specifying a new payer previously unknown tothe system and at least one draft to be generated on an account of thatpayer, said information including a financial institution identificationnumber, payer account identifier, and an amount to be drafted from saidpayer's account; processing means connected to said input means forreceiving said input information and processing said information toformat a draft on said financial account payable to said payee, saiddraft format including identification of said financial account andidentification of said financial institution holding said financialaccount; printing means connected to said processing means forgenerating a paper copy of said drafts using magnetically encoded inkand printing fonts compatible with clearing house check processingequipment; and payee identifying means for providing payeeidentification information on the printed draft instructing that paymentbe made to the payee, and for providing a signatory block for anauthorizing indicia other than said payer's signature; wherein saidsystem incorporates security measures for preventing the generation ofunauthorized drafts, said security measures including the placement ofsaid printing means in a central secure location remote from thelocation of said input means; and wherein said input means is associatedwith said fixed set of one or more payees, and said input means isimplemented using hard coded software which transmits said informationto said processing means in a manner which automatically causesgeneration of a draft payable to a single intended payee which is one ofsaid fixed set of one or more payees associated with said input means,without providing any capacity at the input means to specify a payeeother than a payee in said fixed set of one or more payees.
 27. Anautomated debt collection apparatus for generating a plurality ofauthorized drafts on financial accounts belonging to a plurality ofpayers, the drafts payable to one of a fixed set of one or more payees,comprising:input means for performing a manual input process wherein asystem operator enters information specifying a new payer previouslyunknown to the apparatus and at least one draft to be generated on anaccount of that payer, said information including a financialinstitution identification number, payer account identifier, and anamount to be drafted from said payer's account; processing meansconnected to said input means for receiving said input information andprocessing said information to format drafts on said financial accountpayable to said payee, said draft format including identification ofsaid financial account, identification of said financial institutionholding said financial account, and an instruction to pay said amount tosaid payee including particular identification of said payee, andfurther including a signatory block for an authorizing signature otherthan said payer's signature; output means for transferring said draftformats to an external magnetic printing means connectable to saidprocessing means for generating a paper copy of said drafts usingmagnetically encoded ink and printing fonts compatible with clearinghouse check processing equipment; wherein said apparatus incorporatessecurity measures for preventing the generation of unauthorized drafts,said security measures including the placement of said output means in acentral secure location remote from the location of said input means;and wherein said input means is associated with said fixed set of one ormore payees, and said input means is implemented using hard codedsoftware which transmits said information to said processing means in amanner which automatically causes generation of a draft payable to asingle intended payee which is one of said fixed set of one or morepayees associated with said input means, without providing any capacityat the input means to specify a payee other than a payee in said fixedset of one or more payees.
 28. An automated system for collecting fundsby generating a plurality of authorized drafts on financial accountsbelonging to a plurality of payers, the drafts payable to one of a fixedset of one or more payees, comprising:input means for performing anelectronic information input process wherein information is providedspecifying a new payer previously unknown to the system and a draft tobe generated on an account of that payer, said information including afinancial institution identification number, payer account identifier,and an amount to be drafted from said payer's account; processing meansconnected to said input means for receiving said input information andprocessing said information to format a draft on said financial accountpayable to said payee, said draft format including identification ofsaid financial account, identification of said financial institutionholding said financial account, and an instruction to pay said amount tosaid payee including particular identification of said payee, andfurther including a signatory block for an authorizing indicia otherthan said payer's signature; output means for transferring said draftformats to an external printing means connectable to said processingmeans for generating a copy of said drafts; wherein said particularidentification of said payee is hard coded into the system and cannotreadily be changed.
 29. An automated debt collection apparatus forgenerating a plurality of authorized drafts on financial accountsbelonging to a plurality of payers, the drafts payable to a fixed set ofone or more payees, comprising:a plurality of computer input means, eachperforming an electronic information input process wherein a systemoperator enters information obtained during a telephone conversationwith a payer, said information identifying the payer, a financialinstitution identification number, payer account identifier, and anamount to be drafted from said payer's account; data transmission meansassociated with said computer input means for formatting andtransmitting said information as draft defining information, underconditions such that said formatting and transmission uniquely specifyan intended payee which is one of said fixed set of one or more payees;a computer at a central secure location remote from said computer inputmeans and connected thereto, for receiving said draft defininginformation from the computer input means; printing means connected tothe computer at said central secure location for generating a printedcopy of said drafts on paper stock in a manner compatible with clearinghouse check processing equipment, including identification of saidfinancial account and identification of said financial institutionholding said financial account and a signatory block for an authorizingindicia other than said payer's signature; and payee limiting means forlimiting payees of said drafts to said fixed set of one or more payees,comprising means for printing payee identification information for therequested payee within said fixed set on the paper stock, whileproviding operating software of said computer input means in apredefined configuration with no mechanism in said operating softwarefor changing the printing of said intended payee.
 30. The apparatus ofclaim 29 wherein said hard coded software comprises hard coded payeeidentification information.
 31. The apparatus of claim 30 wherein saidhard coded payee identification information is coded in a format otherthan a sequential ASCII format.
 32. The apparatus of claim 30 whereinsaid hard coded payee identification information is dispersed throughthe program file.
 33. The apparatus of claim 30 wherein a code operatoris applied to said hard coded payee identification information.
 34. Theapparatus of claim 30 wherein said hard coded payee identificationinformation is scrambled.
 35. The apparatus of claim 30 furthercomprising means for requiring an authorized password for obtainingaccess to draft printing functions.
 36. The apparatus of claim 29wherein said data transmission means comprises batch transmission meansfor transmitting information defining a plurality of drafts from theinput means to the central location in a single grouped transmission.37. The apparatus of claim 36 further comprising means for generatingsaid grouped transmission at the end of a business day.
 38. Theapparatus of claim 36 wherein said data transmission means comprisesindividual data transmission means for transmitting information definingeach draft from the input means to the central location upon collectionof information for that draft.
 39. The apparatus of claim 29 whereinsaid input means provides a single input screen with fields forreceiving a payer name, payer identifying information, financialinstitution identification number, payer account identifier, and theamount to be drafted from said payer's account.
 40. The apparatus ofclaim 39 wherein said fields on said input screen are arranged with aplacement corresponding generally to placement of said fields on thegenerated draft.
 41. The apparatus of claim 29 wherein said input meansfurther comprise:a local institutional database comprising financialinstitution identification information; and institution verificationmeans associated with said database for receiving said financialinstitution identification number and comparing said financialinstitution identification number to entries in said institutionaldatabase, wherein when said financial institution is found in theinstitutional database, the institution verification means retrievesidentifying information about the institution and verifies the accuracyof said financial institution identification number, and wherein whensaid financial institution is not found in the institutional database,an error indication is generated.
 42. An automated computer-basedapparatus for collecting funds by generating a plurality of authorizeddrafts on financial accounts belonging to a plurality of payers, thedrafts payable to one of a fixed set of one or more payees,comprising:input means for performing an electronic information inputprocess wherein information is provided specifying a payer and a draftto be generated on an account of that payer, said information includinga financial institution identification number, payer account identifier,and an amount to be drafted from said payer's account; draft requestingmeans associated with said input means for generating and transmitting arequest for generation of a draft payable to one of said fixed set ofone or more payees, based on said input information; processing meansconnected to said draft requesting means for receiving said request andprocessing said information to format a draft on said financial accountpayable to said payee, said draft format including identification ofsaid financial account, identification of said financial institutionholding said financial account, and an instruction to pay said amount tosaid payee, and further including a signatory block for an authorizingindicia other than said payer's signature; output means for transferringsaid draft formats to an external printing means connectable to saidprocessing means for generating a copy of said drafts; and payeelimiting means for limiting payees of said drafts to said fixed set ofone or more payees by printing payee identification information for therequested payee within said fixed set of payees on the paper stock,while providing operating software of said computer-based apparatus in apredefined configuration having no mechanism in said operating softwarefor varying said printing of said intended payee identificationinformation.
 43. The apparatus of claim 42 wherein said hard codedsoftware comprises hard coded payee identification information.
 44. Theapparatus of claim 43 wherein said hard coded payee identificationinformation is coded in a format other than a sequential ASCII format.45. The apparatus of claim 43 wherein said hard coded payeeidentification information is dispersed through the program file. 46.The apparatus of claim 43 wherein a code operator is applied to saidhard coded payee identification information.
 47. The apparatus of claim43 wherein said hard coded payee identification information isscrambled.
 48. The apparatus of claim 43 further comprising means forrequiring an authorized password for obtaining access to draft primingfunctions.
 49. The apparatus of claim 42 wherein said processing meansis located at a central secure location and said draft requesting meanscomprises batch transmission means for transmitting information defininga plurality of drafts from the input means to the central location in asingle grouped transmission.
 50. The apparatus of claim 49 furthercomprising means for generating said grouped transmission at the end ofa business day.
 51. The apparatus of claim 49 wherein said draftrequesting means comprises individual data transmission means fortransmitting information defining each draft from the input means to thecentral location upon collection of information for that draft.
 52. Theapparatus of claim 42 wherein said input means further comprise:a localinstitutional database comprising financial institution identificationinformation; and institution verification means associated with saiddatabase for receiving said financial institution identification numberand comparing said financial institution identification number toentries in said institutional database, wherein when said financialinstitution is found in the institutional database, the institutionverification means retrieves identifying information about theinstitution and verifies the accuracy of said financial institutionidentification number, and wherein when said financial institution isnot found in the institutional database, an error indication isgenerated.
 53. The apparatus of claim 42 wherein said input meansprovides a single input screen with fields for receiving a payer name,payer identifying information, financial institution identificationnumber, payer account identifier, and the amount to be drafted from saidpayer's account.
 54. The apparatus of claim 53 wherein said fields onsaid input screen are arranged with a placement corresponding generallyto placement of said fields on the generated draft.
 55. An automateddebt collection apparatus for generating a plurality of authorizeddrafts on financial accounts belonging to a plurality of payers, thedrafts payable to a fixed set of one or more payees, comprising:aplurality of computer input means, each performing an electronicinformation input process wherein a system operator enters informationobtained during a telephone conversation with a payer, said informationidentifying the payer, a financial institution identification number,payer account identifier, and an amount to be drafted from said payer'saccount; data transmission means associated with said computer inputmeans for formatting and transmitting said information as draft defininginformation, under conditions such that said formatting and transmissionuniquely specify an intended payee which is one of said fixed set of oneor more payees; a computer at a central secure location remote from saidcomputer terminal input means and connected thereto, for receiving saiddraft defining information from the computer input means; printing meansconnected to the computer at said central secure location for generatinga printed copy of said drafts on paper stock in a manner compatible withclearing house check processing equipment, including identification ofsaid financial account and identification of said financial institutionholding said financial account and a signatory block for an authorizingindicia other than said payer's signature; and payee limiting means forlimiting payees of said drafts to said fixed set of one or more payeesby printing payee identification information for the requested payeewithin said fixed set of payees on the paper stock, while providing nomechanism in operating software of said computer input means forchanging the printing of said intended payee; wherein said datatransmission means is implemented using hard coded software whichtransmits said draft defining information in a manner which causes saidprocessing means to generate a draft payable to said intended payee,without providing any capacity to specify a payee other than a payee insaid fixed set of one or more payees.
 56. The apparatus of claim 55wherein said hard coded software comprises hard coded payeeidentification information.
 57. The apparatus of claim 56 wherein saidhard coded payee identification information is coded in a format otherthan a sequential ASCII format.
 58. The apparatus of claim 56 whereinsaid hard coded payee identification information is dispersed throughthe program file.
 59. The apparatus of claim 56 wherein a code operatoris applied to said hard coded payee identification information.
 60. Theapparatus of claim 56 wherein said hard coded payee identificationinformation is scrambled.
 61. The apparatus of claim 56 furthercomprising means for requiring an authorized password for obtainingaccess to draft printing functions.
 62. The apparatus of claim 55wherein said data transmission means comprises batch transmission meansfor transmitting information defining a plurality of drafts from theinput means to the central location in a single grouped transmission.63. The apparatus of claim 62 further comprising means for generatingsaid grouped transmission at the end of a business day.
 64. Theapparatus of claim 62 wherein said data transmission means comprisesindividual data transmission means for transmitting information definingeach draft from the input means to the central location upon collectionof information for that draft.
 65. The apparatus of claim 55 whereinsaid input means provides a single input screen with fields forreceiving a payer name, payer identifying information, financialinstitution identification number, payer account identifier, and theamount to be drafted from said payer's account.
 66. The apparatus ofclaim 65 wherein said fields on said input screen are arranged with aplacement corresponding generally to placement of said fields on thegenerated draft.
 67. The apparatus of claim 55 wherein said input meansfurther comprise:a local institutional database comprising financialinstitution identification information; and institution verificationmeans associated with said database for receiving said financialinstitution identification number and comparing said financialinstitution identification number to entries in said institutionaldatabase, wherein when said financial institution is found in theinstitutional database, the institution verification means retrievesidentifying information about the institution and verifies the accuracyof said financial institution identification number, and wherein whensaid financial institution is not found in the institutional database,an error indication is generated.
 68. An automated computer-basedapparatus for collecting funds by generating a plurality of authorizeddrafts on financial accounts belonging to a plurality of payers, thedrafts payable to one of a fixed set of one or more payees,comprising:input means for performing an electronic information inputprocess wherein information is provided specifying a payer and a draftto be generated on an account of that payer, said information includinga financial institution identification number, payer account identifier,and an amount to be drafted from said payer's account; draft requestingmeans associated with said input means for generating and transmitting arequest for generation of a draft payable to one of said fixed set ofone or more payees, based on said input information; processing meansconnected to said draft requesting means for receiving said request andprocessing said information to format a draft on said financial accountpayable to said payee, said draft format including identification ofsaid financial account, identification of said financial institutionholding said financial account, and an instruction to pay said amount tosaid payee, and further including a signatory block for an authorizingindicia other than said payer's signature; output means for transferringsaid draft formats to an external printing means connectable to saidprocessing means for generating a copy of said drafts; and payeelimiting means for limiting payees of said drafts to said fixed set ofone or more payees by printing payee identification information for therequested payee within said fixed set of payees on the paper stock,while providing no mechanism in operating software of saidcomputer-based apparatus for changing said intended payee; wherein saiddata transmission means is implemented using hard coded software whichtransmits said draft defining information in a manner which causes saidprocessing means to generate a draft payable to said intended payee,without providing any capacity to specify a payee other than a payee insaid fixed set of one or more payees.
 69. The apparatus of claim 68wherein said hard coded software comprises hard coded payeeidentification information.
 70. The apparatus of claim 69 wherein saidhard coded payee identification information is coded in a format otherthan a sequential ASCII format.
 71. The apparatus of claim 69 whereinsaid hard coded payee identification information is dispersed throughthe program file.
 72. The apparatus of claim 69 wherein a code operatoris applied to said hard coded payee identification information.
 73. Theapparatus of claim 69 wherein said hard coded payee identificationinformation is scrambled.
 74. The apparatus of claim 68 wherein saidprocessing means is located at a central secure location and said draftrequesting means comprises batch transmission means for transmittinginformation defining a plurality of drafts from the input means to thecentral location in a single grouped transmission.
 75. The apparatus ofclaim 74 further comprising means for generating said groupedtransmission at the end of a business day.
 76. The apparatus of claim 74wherein said draft requesting means comprises individual datatransmission means for transmitting information defining each draft fromthe input means to the central location upon collection of informationfor that draft.
 77. The apparatus of claim 68 wherein said input meansprovides a single input screen with fields for receiving a payer name,payer identifying information, financial institution identificationnumber, payer account identifier, and the amount to be drafted from saidpayer's account.
 78. The apparatus of claim 77 wherein said fields onsaid input screen are arranged with a placement corresponding generallyto placement of said fields on the generated draft.
 79. The apparatus ofclaim 68 wherein said input means further comprise:a local institutionaldatabase comprising financial institution identification information;and institution-verification means associated with said database forreceiving said financial institution identification number and comparingsaid financial institution identification number to entries in saidinstitutional database, wherein when said financial institution is foundin the institutional database, the institution verification meansretrieves identifying information about the institution and verifies theaccuracy of said financial institution identification number, andwherein when said financial institution is not found in theinstitutional database, an error indication is generated.
 80. Theapparatus of claim 68 further comprising means for requiring anauthorized password for obtaining access to draft printing functions.